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The legal betting world has two new targets in its sights — sweepstakes casinos and prediction markets. Taking out the latter has proven difficult due to some federal protections.
Sweepstakes though? They haven’t been as lucky. States are coming out of the woodwork to curb the explosive growth of sweepstakes casinos. The latest state to launch an all-out war? The Golden State.
That’s right, California betting wants to remain tribal-run — no outside operators. For that to happen, they need outright ban sweepstakes casinos, and that they’re doing. Keep reading and we’ll update you on the situation at hand in California!
Lawmakers Push AB 831 Forward
A bill known as AB 831 is moving through the legislature with strong momentum. It’s already cleared the Senate by a 36-0 vote and now heads back to the Assembly for final approval.
What’s AB 381, you ask? Simple: a piece of legislation that would ban online sweepstakes casinos outright. For those not in the know, sweepstakes casinos are online gaming sites that mimic real casinos but use virtual coins instead of direct cash bets. Players buy coin bundles, play slots or table games, and then try to redeem “sweeps coins” for prizes or cash. It’s this workaround that keeps them in a legal gray zone.
And that’s the issue. California is the largest state in the country, home to a multibillion-dollar gambling industry dominated by tribal casinos. These sweepstakes casinos are a threat to that empire, which California is trying to sniff out early before it gets too big.
Then again, lawmakers in the state might be moving too fast. As a matter of fact, AB 831 didn’t even start out as a gaming bill. Lawmakers swapped in sweepstakes language midway through the process, after the Assembly had already approved it once. Critics say that kind of late pivot leaves the bill rushed and riddled with vague definitions.
That’s exactly what sweepstakes groups are hammering lawmakers on. Phrases like “dual currency system” and “cash equivalents” are undefined, yet they’re the backbone of what the state is trying to outlaw. Without clarity, opponents argue, the ban risks criminalizing everyday promotions that companies like Starbucks or McDonald’s use to market their products.
AB 831 still needs one last sign-off from the Assembly before the legislative session ends. Lawmakers already carved out protections for traditional sweepstakes — the type tied to legitimate sales and marketing campaigns. But the dual-currency casino-style games that have exploded online remain firmly in the crosshairs.
If it passes, regulators will be armed to go after every link in the chain: operators, payment processors, platform providers, even celebrities who promote sweepstakes casinos. So yes, there’s a lot of parties on pins and needles because of this bill.
Tribes Split Over The Ban?
Opposition isn’t just coming from the industry. Some tribes are pushing back too. Four tribal nations — Kletsel Dehe Wintun, Sherwood Valley Rancheria, Mechoopda, and Big Lagoon Rancheria — came out against AB 831. They argue sweepstakes could provide smaller tribes with much-needed economic opportunities, and banning them would make tough financial situations even worse.
But wait… didn’t we just say tribes are all for banning these sweepstakes casinos and maintaining their monopoly? They are. The four tribes we mentioned are a small minority.
The majority are in favor of the bill. This majority is best represented by the California Nations Indian Gaming Association (CNIGA), the state’s most powerful tribal gaming lobby. CNIGA came out in support, saying sweepstakes operators are infringing on their sovereign rights.
The tribes hold a lot of influence in California politics too — something sweepstakes casinos. They’ve spent decades lobbying for their causes and cozying up to in-state leaders. This influence helped them thwart away top mobile apps like DraftKings and FanDuel in 2022 when they tried to enter California’s sports betting market.
If you remember, two propositions — Prop 26 for in-person tribal sports betting and Prop 27 for online/mobile wagering — went to a vote that year. Both went down hard, especially Prop 27, which lost by something like 83 percent. The tribes led the charge in opposition, pouring money into opposing Prop 27, not necessarily to win, but more to ruin Prop 26 chances. That they did against big-pocketed foes like DraftKings. Sweepstakes companies aren’t nearly as affluent.
A Growing National Crackdown
California isn’t acting alone here. Sweepstakes casinos are already under siege in multiple states. Arizona, Connecticut, and Montana have banned them outright. Nevada toughened penalties with SB 256. New York lawmakers passed their own ban that just needs the governor’s signature. Pennsylvania regulators have sent out nearly 20 cease-and-desist letters.
New Jersey is next in line, with lawmakers there preparing a crackdown of their own. Even Ohio and Mississippi are debating restrictions. Everywhere you look, regulators are circling. That’s why California’s move carries so much weight — it’s the biggest market yet to take aim, and its decision could accelerate a nationwide sweep. We’ll monitor the situation and report back here with updates as we get ‘em.
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